'Clunkers' sales point to challenges for Detroit's Big 3

Michigan's allegiance to domestic brands is not the national norm

The majority of Michigan residents buying a car through the Cash for Clunkers program chose a domestic, while less than half did nationally. (Paul J. Richards / Getty Images)

Michigan car buyers tend to purchase what their neighbors make, but that doesn't matter as much to the rest of the country, according to an analysis of data from the "cash for clunkers" incentive program.

"We really are a whole different planet here in Michigan," said Stephanie Brinley, product analyst for AutoPacific Inc. in Troy.

For example: 81.1 percent of Michiganians traded in domestic clunkers and bought domestic replacements, but that number dropped to 42.8 percent in the rest of the nation, according to a breakdown of data from the National Highway Traffic Safety Administration on the program, officially known as the Car Allowance Rebate System, intended to boost sales of fuel efficient vehicles.

In fact, many car buyers across the United States used the cash for clunkers program to buy a foreign nameplate, showing again the challenge General Motors Co., Ford Motor Co. and Chrysler Group LLC have outside of Rust Belt states.

The $3 billion clunker program ran from July 27 to Aug. 25 and encouraged consumers to turn in gas-guzzling vehicles for cars that get at least 22 miles per gallon and trucks capable of 15 mpg or 18 mpg, depending on class. Eligible trade-ins were those that got no more than 18 mpg and were destroyed in exchange for rebates up to $4,500 toward the purchase of a new vehicle.

Nearly 690,000 vehicles were sold while the program was in effect and some automakers increased production in the aftermath to replenish their vehicle stocks. The most common trade-ins across the country were the Ford Explorer sport utility vehicle and the Ford F-150 full-size pickup, according to the NHTSA data.

In car-crazy states like California, the most popular purchase was a Honda Civic; many states also put a Toyota Corolla or Camry at the top of the list.

Some farm states: Oklahoma, Nebraska, North Dakota and South Dakota continued to make the Chevrolet Silverado pickup their first choice.

The data shows Michigan differs wildly from most of the country. More than 57 percent of Americans traded in a vehicle from the Detroit Three and bought a foreign make, but in Michigan less than 19 percent fell into this category.

Conversely, while only 14.3 percent of the country bought a Big Three vehicle after trading in their import, the number was more than triple in Michigan where almost 47 percent went domestic with their new car or truck after trading in their foreign nameplate.

And while the majority of states saw 85.7 percent of buyers trade in their foreign car for another foreign make -- usually a Honda for a Toyota and vice versa -- in Michigan this group represented only 53.2 percent.

The Michigan results "have to do with our relationship to the automakers," Brinley said. "So many people rely on (the Detroit Three) for their livelihood or have family or friends who do."

That influences purchasing decisions in a couple of ways. Employees use their company discounts to buy what they make. And among nonemployees, there is an overarching sense of responsibility or obligation to help the hometown teams, especially in the last couple of years as it became apparent the domestic automakers were struggling.

The travails of the local carmakers have "been polarizing. Some are saying the Big Three got what they deserve, but others are trying harder to do their small part in keeping them going," Brinley said.

When times are good, it is easier to not remain loyal to American brands, she said.

"You don't worry about your purchase having any ramifications for a company's fate. But when times are tough, there is a greater sense of responsibility to pitch in."

Additionally, the United Auto Workers presence remains strong in Michigan and the union has pushed the "buy American" sentiment, Brinley said.

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